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Predicting and analyzing behaviors of investors is of great value to financial institutions. This paper uses survey data from about 9,000 individual investors across China to explore the predictability of decision behaviors by studying demographic characteristics that are relatively easy to obtain. After applying Pearson’s chi-squared test, Spearman rank correlation test, and several data mining methods, we verified that demographic characteristics are closely linked to decision behaviors, and it would be an economical and feasible solution for financial organizations to build initial behavioral prediction models especially when investors’ behavioral data are insufficient. [ABSTRACT FROM AUTHOR]

A typical rule that has been used for the endorsement of new medications by the Food and Drug Administration is to have two trials, each convincing on its own, demonstrating effectiveness. “Convincing” may be subjectively interpreted, but the use of p-values and the focus on statistical significance (in particular with p < .05 being coined significant) is pervasive in clinical research. Therefore, in this paper, we calculate with simulations what it means to have exactly two trials, each with p < .05, in terms of the actual strength of evidence quantified by Bayes factors. Our results show that different cases where two trials have a p-value below .05 have wildly differing Bayes factors. Bayes factors of at least 20 in favor of the alternative hypothesis are not necessarily achieved and they fail to be reached in a large proportion of cases, in particular when the true effect size is small (0.2 standard deviations) or zero. In a non-trivial number of cases, evidence actually points to the null hypothesis, in particular when the true effect size is zero, when the number of trials is large, and when the number of participants in both groups is low. We recommend use of Bayes factors as a routine tool to assess endorsement of new medications, because Bayes factors consistently quantify strength of evidence. Use of p-values may lead to paradoxical and spurious decision-making regarding the use of new medications. [ABSTRACT FROM AUTHOR]

Previous researches support that graphs are relevant decision aids to tasks related to the interpretation of numerical information. Moreover, literature shows that different types of graphical information can help or harm the accuracy on decision making of accountants and financial analysts. We conducted a 4×2 mixed-design experiment to examine the effects of numerical information disclosure on financial analysts’ accuracy, and investigated the role of overconfidence in decision making. Results show that compared to text, column graph enhanced accuracy on decision making, followed by line graphs. No difference was found between table and textual disclosure. Overconfidence harmed accuracy, and both genders behaved overconfidently. Additionally, the type of disclosure (text, table, line graph and column graph) did not affect the overconfidence of individuals, providing evidence that overconfidence is a personal trait. This study makes three contributions. First, it provides evidence from a larger sample size (295) of financial analysts instead of a smaller sample size of students that graphs are relevant decision aids to tasks related to the interpretation of numerical information. Second, it uses the text as a baseline comparison to test how different ways of information disclosure (line and column graphs, and tables) can enhance understandability of information. Third, it brings an internal factor to this process: overconfidence, a personal trait that harms the decision-making process of individuals. At the end of this paper several research paths are highlighted to further study the effect of internal factors (personal traits) on financial analysts’ accuracy on decision making regarding numerical information presented in a graphical form. In addition, we offer suggestions concerning some practical implications for professional accountants, auditors, financial analysts and standard setters. [ABSTRACT FROM AUTHOR]